Hindustan Aeronautics Limited (HAL) witnessed a sharp fall in its share price on Monday after a Tejas fighter jet, manufactured by the Indian PSU, crashed during the Dubai Air Show, resulting in the death of an Indian Air Force (IAF) officer.
HAL shares fell nearly 9% to Rs 4,205.25 apiece on the BSE, hitting their lowest level in more than seven months.

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Defence Stocks in the Red What We Know About the Tejas Crash?Analysts’ Views: Sentiment Impact but Long-Term Confidence Intact Brokerage Outlook: No Major Financial Impact Expected

The sudden decline came as investors reacted to the tragic accident and the broader sentiment shift around India’s defence manufacturing ecosystem. The Tejas aircraft, which has been showcased globally as a symbol of India’s growing defence capabilities, was performing at the air show when the crash occurred.

Defence Stocks in the Red

The impact was not limited to HAL alone. Most defence sector stocks opened in red, pulling the Nifty Defence index down by nearly 1.5% in morning trade.
Along with HAL, stocks such as Data Patterns, GRSE, Zen Technologies, Paras Defence, BEML, and Cochin Shipyard also slipped around 2% each.
The Tejas crash clearly triggered a sector-wide negative sentiment, as defence companies are closely interlinked through orders, capability demonstration, and global reputation.

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What We Know About the Tejas Crash?

The crash occurred on November 21, when the Tejas Light Combat Aircraft (LCA) was performing manoeuvres at the Dubai Air Show in front of a large audience.
Videos circulating online show the aircraft plunging rapidly before erupting into flames on impact.

A thick plume of black smoke rose over the Al Maktoum International Airport, immediately drawing attention as emergency sirens echoed across the venue. The IAF confirmed that the pilot sustained fatal injuries in the accident.

In its official statement, the IAF said:
“An IAF Tejas aircraft met with an accident during an aerial display… The pilot sustained fatal injuries. A court of inquiry is being constituted to ascertain the cause of the accident.”

The Tejas is a single-engine, 4.5-generation multirole combat aircraft, developed by the Aeronautical Development Agency (ADA) and manufactured by HAL. It is one of India’s most prominent indigenous defence projects.

Analysts’ Views: Sentiment Impact but Long-Term Confidence Intact

Market experts believe that such stock reactions are typical after high-visibility aircraft accidents.
Analyst Abhinav Tiwari of Bonanza noted that HAL has seen similar declines during past incidents in March 2024 and February 2019.

However, he emphasised that “such events rarely expose structural flaws unless investigations reveal deeper issues.”
He added that HAL continues to have an enviable order book, including major Tejas contracts, underscoring its central role in India’s defence ecosystem.

Another expert, Harshal Dasani of INVasset PMS, said the sentiment shift was expected:

“When a frontline indigenous fighter suffers an accident on a global stage, it triggers immediate questions on reliability, export readiness, and operational safety.”

He also pointed out that although the government clarified earlier concerns about oil leakage as unrelated, the crash places HAL under heightened global scrutiny, especially at a time when expectations from Tejas are extremely high.

Brokerage Outlook: No Major Financial Impact Expected

Despite the sharp fall in HAL’s share price, brokerage house Elara Capital has maintained a ‘Buy’ call on the stock.
It set a target price of Rs 5,680 per share, indicating an upside potential of nearly 24% from the previous closing price.

The brokerage believes the accident will not materially affect HAL’s orders or delivery timelines, as investigations into the cause are still underway and no structural issue has been identified.

Conclusion

The HAL share price fall reflects immediate market anxiety following the Tejas crash at the Dubai Air Show. However, analysts largely agree that the long-term fundamentals of HAL remain strong, backed by robust orders and its critical role in India’s defence sector. The upcoming court of inquiry will be key in determining the technical cause of the crash and addressing investor concerns going forward.

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